Will Housing Weather The Storm?
It’s always a good idea to know how to use the tools of your trade. Make sure your sound is on, LOL.
But I digress…
Yes, Contracts Are Down, But So Is New Inventory
I have been the author of an expanding series of market reports for Douglas Elliman since 1994. Our New Signed Contract series was the latest, launched during the pandemic. We track activity that only occurred in the current month to get a better sense of supply and demand of the moment through newly signed contracts and new inventory.
Elliman Report: November 2022 New York New Signed Contracts
Elliman Report: November 2022 Florida New Signed Contracts
Elliman Report: November 2022 Colorado New Signed Contracts
Elliman Report: November 2022 California New Signed Contracts
Here are a sampling of charts from each region. For the full set go to Miller Samuel Charts.
Market Update: New Inventory Is Falling
I write a column for Elliman Magazine called “Market Update” that presents a chart and context around it. Its kind of like my nine-year column “Three Cents Worth” at the old Curbed but more grown-up and without the snark.
Bloomberg TV: Housing Inventory Is Too Low For Significant Price Cuts
I joined Lisa Abramowicz, the co-host of Bloomberg Surveillance TV to talk about listing inventory. My Zoom app locked up downloading updates as I opened it and I couldn’t get it to work so I settled for a phone call. Technology.
Jonathan Miller, president and CEO at Miller Samuel, says “it’s hard to imagine a significant drop in pricing,” as he discusses the state of the US housing market on “Bloomberg Surveillance.” (Source: Bloomberg)
A few days later, this Bloomberg piece came out: Sellers Are Pulling Properties off the Market at Record Pace. Here’s a chart from the piece.
Cheddar TV: NYC Has More Airbnb Listings Than Long-Term Rental Units
I was invited on Cheddar to talk about Airbnb launching a listing service for rental apartments with some of the country’s biggest landlords and property managers. My thoughts:
- Takes inventory that would have been long-term rental and moves to short-term rental, keeping prices high
- It’s generally a different product, short-term stay.
- NYC can only use primary residences and have more than 30-day lease terms, which isn’t observed from what I’ve read.
- On the good side, more exposure this brings will promote better behavior by Airbnb.
- Airbnb renters achieve 2.5 times a long-term lease, so these new landlords aren’t going away.
Brick Underground Podcast: Racism In Appraisals: It Starts With The Appraisal Foundation
TAF responds to my claim by misrepresenting what they’ve actually done:
Miller blames The Appraisal Foundation, the country’s authority on the valuation profession, for not doing more to encourage diversity in the business, and not making it easier for candidates from diverse backgrounds to enter the profession. The Appraisal Foundation say they are committed to rooting out bias and discrimination and now have online training and grants to make a career in appraisals more accessible.
My favorite charts of the week of our own making
Queens and Brooklyn
Manhattan and its regions
My favorite housing market charts of the week made by others
Hmm I wonder why LA rent is so high and everyone is paying through the nose to live in crappy apartments from the 60s 🤔 pic.twitter.com/CCiemVsCSn— email@example.com (@maxdubler) December 1, 2022
My favorite random charts of the week made by others
(For earlier appraisal industry commentary, visit my old clunky REIC site.)
Brick Undergound Podcast: Racism In Appraisals: It Starts With The Appraisal Foundation
For those of you that skipped through my real estate content up top (I know who you are), I suggest you listen to my podcast interview earlier in this newsletter. 😉
TAF Is A Dave Bunton Monarchy And John Ryan Has The Receipts
John Ryan, a multi-decade active member of TAF, was forced out of his AQB Chairmanship for daring to address “barriers to entry.” Both ASB and AQB are supposed to operate independently, yet the FODs set the agenda. John dared to go against Dave and was removed from his chairmanship without explanation and then TAF effectively ghosted him. Here is the outline of what happened:
Where is the governance? Apparently, there isn’t any. And they are afraid to put anything in writing because they know its incriminating. What about their outside legal counsel Elliot Adler? How can he be ok with this lack of governance? Is there a reason for this lack of transparency and hand-wringing?
Here is a series of correspondence sent by John Ryan’s attorneys that document AQB and BOT’s actions chronologically, Everyone on the BOT has seen them.
May 25, 2022, Letter Asking for specifics in writing why he was removed as AQB chair.
June 13, 2022 letter asking for the reasons the executive committee removed him from the chairmanship.
From November 1, 2022 “Appeal of Sanction and Threatened Censure” since there hasn’t been a hearing on the merits.
November 16, 2022 letter requesting any information on the decision that was to be made at the Boston board meeting on November 5, 2022.
UPDATE (due to a technical difficultly, I just added the following letter on December 2nd, at 5:54pm)
November 22, 2022 resignation letter.
RECAP there is no real governance over the executive leadership at TAF and those in executive leadership are there because they were selected for their willingness to be malleable to the monarchy. Those that realized the real story afterward either resigned or were rolled off the BOT. Those that remain to think this behavior is ok and weirdly think their role is a resume builder or there is some prestige associated with it. Nope, not anymore.
In the coming weeks, I will call out the big companies some of these BOT members work for and ask: “Do you know what your employee does in their free time that is potentially brand-damaging to you?”
The States Need To Rethink Time Requirements For Online Exams
It was a rainy weekend, so I thought I’d take online classes to meet my continuing education requirements. I’ve always been a fast test taker, often trying to be the first person in the classroom to bring my answers to the proctor first. I’m one of those annoying people, but if I pass the test, should I be penalized for taking the test fast? For my first appraisal licensing exam years ago, I finished it in around 40 minutes, but we were given 2 hours to take it. Should I have been forced to sit at my desk and wait until the two hours were up? New York State didn’t think so.
Yet New York State thinks so for taking online classes. I took a three-hour course in 52 minutes and am not allowed to take the final exam yet. The following dialog box says it all.
I have to log on and click around until I have accumulated 2.5 hours of “seat” time. In other words, they are punishing people that can take a class faster than average. Why? Presumably, a professional had rated the course as three hours, and the state agreed. If someone can prove they understood the material by passing all the chapter quizzes, why should they be forced to waste 98 additional minutes? I can’t ever get back those 98 minutes.
Are appraisers children? Wait, don’t answer that.
What purpose does “waiting” serve (a.k.a. known as “seat time”)?
- I pay the same course fee as everyone else.
- I must pass the same chapter quizzes as everyone else to take the final.
- Some people take tests faster than others, right?
Is the purpose of a continuing education learning experience only to sit in a chair for a designated period? If I went through the materials and passed all the chapter quizzes in 52 minutes, why do I have to waste another 98 minutes?
The lack of waiting required for online classes has always been a breath of fresh air to me. Now that benefit seems to be over.
As much as I’d love to blame McKissock, this is a NY state requirement and common across the U.S. It is time for the 55 states and territories to rethink licensing requirements. A time calculation should not be part of math if a student takes a class and can pass the test on the materials presented. Since there is zero empirical evidence that those additional 98 minutes will make me understand the course materials any better, taking away 98 minutes of my potential livelihood is wrong.
Hopefully, state regulators will look at this lack of fairness in the CE licensing process.
While we’re at it, TAF, the author of the bat-shit crazy letter, the chickenshit letter and the subject of an active investigation by HUD on whether USPAP promotes a lack of diversity in the appraisal profession (BLS: 97.7% of appraisers are white), has not provided any technical evidence that shows how specific hour requirements for licensing are needed. Why? Yes, 1,000, 1,500, 3,000 are impressive numbers. Yet no such research on experience hours validates them as reasonable benchmarks. They were just made up. In other words, experience hours to determine whether an appraiser is competent has no tangible empirical support. The numbers are only there to sound impressive.
For an industry that requires its members to apply critical thinking to solving valuation problems and protecting the public trust, we sure forgot about that when striving to achieve a certain number of hours to be competent.
NAR Urges TAF To Include BPO Experience As Experience Credit
While I’m not advocating this solution, and I wonder whether the real estate appraiser board at NAR does. Everyone in the world seems to recognize TAF’s approach to entry into the appraisal profession is flawed except TAF.
From Ann O’Rourke’s must-subscribe newsletter, Appraisal Today, celebrating its 30th anniversary. I’ve been a subscriber for years:
NAR Urges Appraisal Foundation To Establish Equivalency Credit for Education and Experience
Excerpts: The AQB previously considered the option of allowing parallel professional non-appraisal experience. In a July 9, 2015, Concept Paper – Alternate Track to the Experience Requirements in the Real Property Appraiser Qualification Criteria, the AQB asked: “Are there practical alternatives for some (or all) of the appraisal experience requirements to include non-appraisal experience?”
The National Association of REALTORS® believes there are alternatives to some of the experience requirements that the AQB should consider.
NAR sent a letter to the Appraisal urging the Appraisal Foundation (TAF) to review the experience and education of workers in parallel professions and consider it for potential credit to satisfy the accreditation requirements of appraiser licensing.
Reminder to A La Mode Users: Remember To Review Your Preferences
Four years ago I wrote a post in Appraiserville called “CoreLogic’s A La Mode is Pulling A Facebook Privacy Play” when we realized a particular checkbox was checked in our preferences when the software was updated. My post generated a lot of feedback and I even got a call from A La Mode’s President as well as COO at the time with denials.
This week we had all our staff double-check their preferences since there have been a lot of updates recently and as I was assured back in 2018, A La Mode doesn’t check the box automatically with those updates. I shared a screenshot below.
However, the preference box confirms they have the ability to take your data. This isn’t a newsflash but just a reminder to be vigilant. They use the you opt-in to share your data, and you get others’ data approach to lull you into complacency. I work in a market where data is very raw and primitive, without a real MLS, so I don’t want to share data with my competitors because it is expensive to acquire. Sigh.
OFT (One Final Thought)
Brilliant Idea #1
If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them because:
- They’ll be more fascinated with weather reports;
- You’ll bang your drum;
- And I’ll listen to The Beatles.
Brilliant Idea #2
You’re obviously full of insights and ideas as a reader of Housing Notes. I appreciate every email I receive, and it helps me craft the following week’s Housing Note.
See you next week.
Reads, Listens and Visuals I Enjoyed
- NYC May Lose 10,000 Airbnb Listings Due to New Regulations
- Country-Folk Songwriter John Prine’s Nashville Home Lists for Nearly $5 Million [Mansion Global]
- Police shut down suspected brothel in Koeppel-owned Midtown East building [Crain's New York]
- Home Sellers Are Taking Listings off the Market in Record Numbers as Buyer Demand Fizzles — Money [Apple Stocks]
- New Yorkers Who Live Above Where They Work [The Real Deal]
- Help us map New York City’s neighborhoods. [NY Times]
- The U.S. Needs More Housing Than Almost Anyone Can Imagine [The Atlantic]
- Housing Affordability is Worst on Record [The Real Deal]
- Hong Kong homeowners looking to sell have missed window as slump persists [SCMP]
- Sellers Are Pulling Properties off the Market at Record Pace [Bloomberg]
- Mortgage Rates [FreddieMac]
- You Should Probably Wait to Buy a Home [The Atlantic]
- The new disconnect between mortgages and house equity [FRED Blog]
- Inflation Adjusted House Prices 3.3% Below Peak [Calculated Risk]
- Florida Developers Are Holding Off on Big Projects as Insurance Costs Surge [Wall Street Journal]
My New Content, Research and Mentions
- Another pricey month pushes some New Yorkers out of the rental market: report [Crain's New York]
- November Rents Hold Steady, But Signs of Softening Appear [The Real Deal]
- House Listings Drop 26% in L.A. County During November [The Real Deal]
- Contracts for homes in the Hamptons fall by 50% [NY Post]
- Manhattan renters face sticker shock with average rent at $5,200 [CNBC]
- Manhattan Apartment Rents Inch Up After Three Months of Declines [Bloomberg]
- The 30-year, fixed-rate mortgage isn’t your only option. Here are 4 other types of loans to consider
- Deals for North Fork, Hamptons Homes Fall 50% in November [The Real Deal]
- Manhattan and Brooklyn Residential Contracts Normalize [The Real Deal]
- Racism and the lack of diversity in the appraisal business [Brick Underground]
- NYC Has More Airbnb Listings Than Long-Term Rental Units [Cheddar]
Recently Published Elliman Market Reports
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 11-2022 [Miller Samuel]
- Elliman Report: Colorado New Signed Contracts 11-2022 [Miller Samuel]
- Elliman Report: California New Signed Contracts 11-2022 [Miller Samuel]
- Elliman Report: Normandy Isles/Normandy Shores New Signed Contracts 11-2022 [Miller Samuel]
- Elliman Report: Florida New Signed Contracts 11-2022 [Miller Samuel]
- Elliman Report: New York New Signed Contracts 11-2022 [Miller Samuel]
- Elliman Report: Manhattan, Brooklyn & Queens Rentals 10-2022 [Miller Samuel]
- Elliman Report: Colorado New Signed Contracts 10-2022 [Miller Samuel]
- Elliman Report: California New Signed Contracts 10-2022 [Miller Samuel]
- Elliman Report: Normandy Isles/Normandy Shores New Signed Contracts 10-2022 [Miller Samuel]
Appraisal Related Reads
- 5 Ways Homeowners Can Save Money [Birmingham Appraisal Blog]
- Getting high on housing hope [Sacramento Appraisal Blog]
- Watch – Lowballed [Our America]
- Urban League, Wells Fargo Tackle Diversity in Appraisal Industry [Biz New Orleans]
- Lowballed: Philadelphia-area homeowners of color receive unfair appraisals [6 ABC]
- Black homeowners in New Jersey twice as likely as white homeowners to have homes under-appraised [ABC 7 NY]
Extra Curricular Reads
- Secrets of the Christmas Tree Trade [Curbed]
- Pantone’s Color of The Year Makes a Splash at Miami Art And Design Week [CandysDirt.com]
- The Fat Man's Comin', by David Byrne [Band Camp]
- NYC is hiring a rat czar. ‘General aura of badassery’ required. [Gothamist]
- Payphones Are Coming Back in Philadelphia Thanks to Linux, No Quarters Required [MUO]
- Airbnb rentals outnumber available apartments in New York City [Fortune]
- Nareit Research Estimates 150 Million Americans Invested In REITs [REIT]
- EU warns Musk that Twitter faces ban over content moderation [Financial Times]
- The next round of counting begins in Alaska. Here's how ranked-choice voting works [NPR]
- 15 Acres of Downtown Miami For $1 Billion; Downtown’s New Outdoor Art Museum [The Big Bubble Miami]
- I’ve been a NYC doorman for 22 years. This is what I think about holiday tipping [Brick Underground]
- 15 Oldest Private Clubs in NYC [Untapped New York]
- The University of California business model is crumbling under the weight of the cost of living [Grid News]